ASX Opens Test Environment for DLT Equities Settlement System

The blockchain-based clearing and settlement system will replace the exchange’s CHESS system.

The Australian Securities Exchange (ASX) announced this Tuesday that it has successfully opened the Customer Development Environment (CDE) for its new equities clearing and settlement system which will replace its decades-old CHESS system.

The new clearing and settlement system is based on distributed ledger technology (DLT). With the opening of the CDE, customers of the Australian exchange can experiment with the new system as well as design, build and test system changes.

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The opening of the CDE follows the first of seven ‘drops’ of software code being made available to ASX clients on April 30. Approximately every eight weeks, the company will make additional functionality available. Full functionality in the CDE is expected by mid-next year.

Cliff Richards of ASX
Cliff Richards
Source: ASX

Commenting on the announcement, Cliff Richards, ASX’s Executive General Manager Equity Post-Trade Services said: “Delivering the development environment for customers on schedule is a major step forward in ASX’s CHESS replacement journey.”

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“We are proud of this achievement and very grateful for the support of our partner Digital Asset and our customers. While we believe distributed ledger technology offers exciting opportunities for the whole market to innovate, there is much still to do. We continue to work closely with our customers as we progress towards delivery of the new system.”

ASX Delays Launch of CHESS Replacement System

The new blockchain system which will replace CHESS was originally expected to go live towards the end of 2020 in a single cutover weekend. However, as Finance Magnates reported, the exchange delayed the launch by six months, with the new date set for March or April of 2021.

The delay was the result of feedback from market participants, who questioned the feasibility of the 2020 launch date. Taking the responses into consideration, ASX extended its user development and testing period by six months as well as its mandatory accreditation by the same period of time.

Yuval Rooz, CEO of Digital Asset
Yuval Rooz, CEO of Digital Asset
Source: LinkedIn

“This is an important milestone for everyone involved in the CHESS replacement project, which continues to proceed according to the implementation timeline set by ASX. With the delivery of the CDE, ASX customers get their first glimpse of what the new CHESS system can provide,” added Yuval Rooz, Digital Asset Chief Executive.

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